Financial Services Cost Base will be Transformed by Blockchain

Sergio Ermotti, the CEO of Swiss financial services provider UBS Group, said on an interview on CNBC June 18, that blockchain will be essential for the financial service industry.

The CEO said that the underlying technology will help free up some resources to become more efficient, he also added that is is a great way to allow us to reduce cost. He also explained that blockchain will prove to be transformative in five to ten years’ time, making UBS more competitive.

Ermotti said:

“Our industry will continue to be under pressure, in terms of gross margins. It’s no doubt. The only way you can stay relevant is not only being strong in terms of capital, in terms of product, the quality of people you have, the advice you give to clients. You need also to be able to price it correctly”

A partnership was made by UBS and IBM, Bank of Montreal, Caixa Bank, Commerz Bank, and Este Group last fall, and it is called Batavia. It involves exporting cars from Germany to Spain, also textiles from Austria to Spain.

Alex Weber, the UBS Chairman, said that they will not sell any bitcoin products and they will not trade with any other cryptocurrencies. While the company is exploring the blockchain uses for business, Weber added that cryptocurrencies are often not transparent and therefore open to being abused.